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Income Tax Distributions to Local Governments

Statutory reference

35 ILCS 5/901 b - Illinois Income Tax Act

What is Illinois Income Tax?

Illinois Income Tax is a tax that is imposed on the privilege of earning or receiving income in or as a resident of the state of Illinois. This tax applies to income for each taxable year.

Who is liable for Illinois income tax?

This tax is imposed on every

  • individual,
  • trust,
  • estate, and
  • corporation.

What are the rates?

  • For individuals, trusts, and estates, the Illinois Income Tax is 4.95 percent (.0495).
  • For corporations (excluding S corporations), the Illinois Income Tax is 7 percent (.07).

What share do local governments receive?

Beginning August 1, 2017, and through July 31, 2022, local governments receive 6.06 percent of the net collections of all income tax received from individuals, trusts, and estates, and 6.85 percent of the net collections of all income tax received from corporations. Beginning August 1, 2022, and through July 31, 2023, the 6.06 percent rate will increase to 6.16 percent. Then on August 1, 2023, that rate increases to 6.47 percent.

The amount that each municipality or county receives is based on its population in proportion to the total state population.  The population figures are determined based on the latest census conducted by the United States Census Bureau and certified by the Office of the Illinois Secretary of State.

Approximately the third week of each month, the Illinois Department of Revenue certifies to the Office of the Illinois State Comptroller the amounts to be allocated based on net collections from the prior month.  This money is distributed to local governments through the Local Government Distributive Fund (LGDF).

Net collections are the total collections minus deposits that are made into the refund fund.

Who can local governments contact regarding their income tax distributions?

You may contact the Local Tax Allocation Division through your MyLocalTax account or by using the contact information below.

LOCAL TAX ALLOCATION DIVISION (3-500)
ILLINOIS DEPARTMENT OF REVENUE
101 W JEFFERSON
SPRINGFIELD IL 62702

217 785-6518
217 785-6527 FAX

EMAIL: rev.localtax@illinois.gov